Cove Financial Planning, LLC
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How Cove Financial Planning Responds to Market Downturns

 

In this video, I explain the steps we take for our clients at different levels of market drawdown.

Market downturns are normal, historically speaking.

In fact, the stock market declining by double digits is pretty standard during most years.

While the best course of action in the face of a market drop for long-term, diversified investors is to stay the course and put the blinders on, there are certainly strategic actions we can consider taking to reduce volatility, lower your taxes, and support your financial plan.

Download the Cove Market Downturn Playbook

Cove Actions with Each Market Drop

-5% Decline

  • Review portfolio drift and cash needs

  • Prepare for rebalancing and tax-loss harvesting opportunities

  • Share timely perspective on market decline

-10% decline

  • Rebalance accounts when target-allocation bands are breached

  • Harvest eligible tax losses and model an initial Roth conversion

  • Confirm near-term withdrawals are insulated from depressed equities

-15% Decline

  • Analyze additional portfolio rebalance

  • Evaluate Roth conversion in current, marginal tax bracket

  • Refresh financial-planning & retirement projections using current portfolio values

-20% Decline

  • Rebalance portfolio and consider additional Roth conversions in higher-than-normal tax bracket

  • Review retirement-income guardrails and spending flexibility

  • Consider estate, gifting, and contribution opportunities

-30% Decline

  • Update financial plan with current account values

  • Deploy remaining rebalancing

  • Finalize tax strategy and reconfirm long-term asset allocation

Do you have questions about your investment portfolio? Reach out to me at Ben@coveplanning.com or schedule a free consultation call.

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Ben Smith is a fee-only financial advisor and CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional with offices in Milwaukee, WI, Evanston, IL and Minneapolis, MN, serving clients virtually across the country. Cove Financial Planning provides comprehensive financial planning and investment management services to individuals and families, regardless of location, with a focus on Socially Responsible Investing (SRI).

Ben acts as a fiduciary for his clients. He does not sell financial products or take commissions. Simply put, he sits on your side of the table and always works in your best interest. Learn more how we can help you Do Well While Doing Good!

Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Ben Smith, and all rights are reserved. Read the full Disclaimer.

 
Ben Smith